Hey there, time traveller!
This article was published 30/6/2021 (212 days ago), so information in it may no longer be current.
The future of the mining industry in Manitoba received a major boost on Tuesday as Brazilian mining giant, Vale, said it is investing $150 million that will extend current mining activities in Thompson by 10 years.
But that will just be a prelude to what could turn into close to $1 billion of new investment over the next decade to significantly expand mining operations in the northern Manitoba city into 2040.
The Phase 1 work is already underway upgrading ventilation, building increased backfill capacity and additional power distribution that should be completed by 2023.
Meanwhile, the company has embarked on an extensive exploration drilling program to prove out potentially massive new resources that the company and industry officials have long believed to be there.
The news has been a long time coming for the city and the beleaguered mining industry in northern Manitoba. It was more than 10 years ago that the company announced it was shutting down the nickel smelter and refinery in Thompson and it also suspended operations at its smaller Birchtree mine. Those closures took place in 2017 and 2018 resulting in the elimination of hundreds of jobs.
Mark Travers, Vale’s Toronto-based executive vice-president of base metals, said while the new capital investment will not include the creation of any new jobs, it would be reasonable to expect the potential development of a new mine over the course of the next decade.
"Thompson has gone through a difficult 11 years," Travers said. "It’s good to see us all moving forward past that difficult period."
Nickel prices have been trending upwards over the past year and are near five-year highs and demand for nickel, a key component in many battery designs used in electric vehicles, is expected to surpass current supply.
"This is about mine expansion for coming decades," Travers said. "We know the Thompson Nickel Belt is rich and that the Thompson mine has more to give."
The infrastructure work that has begun will enhance productivity at the existing Thompson mine by 30 per cent, a key element in convincing company executives in Brazil to continue to invest in northern Manitoba.
Travers said the nickel mined in Thompson is among the lowest carbon-intensive nickel on the globe.
"That is something electric vehicle battery makers are very aware of and really like," he said.
While there is optimism about future ore bodies to mine, Travers said they have to prove it out with the exploration drilling.
During 2020, the company embarked on its largest regional drilling program in northern Manitoba in 20 years. This year’s exploration budget is $23 million and is budgeted to increase to $37 million next year.
John Morris, the co-director of the Mining Association of Manitoba, said Tuesday was a great day for the industry and an indication Manitoba is a great place to do business.
"This type of investment is vital for the future of mining in Manitoba," Morris said. "It creates spinoffs and encouragement for other investment opportunities. When you see this type of capital injection in a major mining operation it is a fantastic day."
The company’s commitment to Thompson is happening while its much larger workforce in Sudbury has been on strike for close to four weeks now. Union members there have taken exception to company concessions to reduce retirement benefits.
While Warren Luky, president of the USW local 6166 in Thompson, said they are in solidarity with their union brothers and sister in Sudbury, he said the news of the company’s investment in Thompson was a relief.
"We know there is a lot of nickel under our feet in the Thompson ore body and Vale knows it too, now," he said. "Everybody is glad they are investing the money. We need the enhanced ventilation our for underground miners as soon as possible. They are working in very tough conditions."
Thompson’s local members voted to accept a contract from Vale one and a half years ago that contained some of the same concessions the Sudbury workers are rejecting.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.